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Debt holds U.S. troops back from overseas duty

Thousands of U.S. troops are barred from overseas duty because they are so deep in debt they are considered security risks, according to an AP review of military records.
A used car dealership in Oceanside, Calif., offers financing to members of the armed forces. The lot is one of many businesses in downtown Oceanside offering credit to Marines from nearby Camp Pendleton.
A used car dealership in Oceanside, Calif., offers financing to members of the armed forces. The lot is one of many businesses in downtown Oceanside offering credit to Marines from nearby Camp Pendleton.Denis Poroy / AP
/ Source: The Associated Press

Thousands of U.S. troops are being barred from overseas duty because they are so deep in debt they are considered security risks, according to an Associated Press review of military records.

The number of troops held back has climbed dramatically in the past few years. And while they appear to represent a very small percentage of all U.S. military personnel, the increase is occurring at a time when the armed forces are stretched thin by the wars in Iraq and Afghanistan.

“We are seeing an alarming trend in degrading financial health,” said Navy Capt. Mark D. Patton, commanding officer at San Diego’s Naval Base Point Loma.

The Pentagon contends financial problems can distract personnel from their duties or make them vulnerable to bribery and treason. As a result, those who fall heavily into debt can be stripped of the security clearances they need to go overseas.

While the number of revoked clearances has surged since the beginning of the Iraq war, military officials say there is no evidence that service members are deliberately running up debts to stay out of harm’s way.

Officials also say the increase has not undermined the military’s fighting ability, though some say it has complicated the job of assembling some of the units needed in Iraq or Afghanistan.

One problem, numerous causes
The problem is attributed to a lack of financial smarts among recruits; reckless spending among those exhilarated to make it home alive from a tour of duty; and the profusion of “payday lenders” — businesses that allow military personnel to borrow against their next paycheck at extremely high interest rates.

The debt problems persist despite crackdowns on payday lenders and the financial counseling the Pentagon routinely offers to the troops.

Data supplied to the AP by the Navy, Marines and Air Force show that the number of clearances revoked for financial reasons rose every year between 2002 and 2005, climbing ninefold from 284 at the start of the period to 2,654 last year. Partial numbers from this year suggest the trend continues.

More than 6,300 troops in the three branches lost their clearances during that four-year period. Roughly 900,000 people are serving in the three branches, though not all need clearances.

Army withholds financial data
The figures gathered by the AP represent just a piece of problem, because the Army — which employs an additional 500,000 people and accounts for the vast majority of the 160,000 U.S. troops in Iraq and Afghanistan — rejected repeated requests over the past month to supply its data, saying such information is confidential.

At Point Loma, Patton said clearance revocations in key areas such as military police forces have gotten so common that he often looks for two sailors to fill a single posting.

Still, Patton said he had never heard of anyone racking up bills to get out of combat. “There are folks who find ways of avoiding being deployed, as there always will be, but I’ve never seen any do it through finances,” he said.

Security clearances are revoked when service members’ debt payments amount to 30 percent to 40 percent of their salary. The exact amount depends on the military branch.

There are three levels of clearance — confidential, secret and top secret. Not all troops need clearance. Marine infantrymen don’t, but some Marine specialists, such as those in intelligence, do. So do many jobs in the Navy and Air Force.

Secrets for sale?
Financial problems are the overwhelming reason security clearances are revoked. Other reasons include criminal activity, questionable allegiance and ill health.

A key reason the military revokes clearances on financial grounds is the fear that soldiers in debt might be tempted to sell secrets or equipment to the enemy.

Also, “when they are over there fighting, we like them to have their heads in the game,” said Maj. Gen. Michael Lehnert, commander of Marine Corps bases in the western United States. “We like to have them ... not worrying about whether or not they are going to be able to make the mortgage payment or car payment.”

Members of the brass also blame runaway interest rates at payday lending businesses, many of which are clustered outside bases around the country. Several states have cracked down on payday lending practices, and on Tuesday, President Bush signed legislation limiting how much these businesses can charge military personnel.

Living for the moment
Some personnel fall into debt upon returning from combat. “It can be hard to cut that sense of elation and desire to live for the moment,” Lehnert said. “Some tend to get themselves overextended financially.”

Also, when they go to war, they get combat pay, and none of their income is taxed. That can lead them to overspend when they come home.


Patton said that like other services, the Navy offers zero-interest emergency loans. Also, military personnel commonly take money-management classes as part of basic training.

“Every time we go in and do an indoctrination brief, there is instruction or training in place to give them some of the pitfalls of debt,” said Terry Harris, a personal finance educator at the Pensacola Naval Air Station in Florida. “We do inform them about the pitfalls of security clearances being lost to that.”

The increase in finance-related revocations could actually be a good sign — it could reflect greater awareness among the troops, according to Chief Master Sgt. Rodney J. McKinley, the Air Force’s highest-ranking noncommissioned officer.

“We have a few more people coming forward and saying, ‘Hey, I’m having some financial difficulty and need help,’ versus going down the other path where they keep so quiet,” McKinley said.